On January $1,2023,$ when the fair value of its common shares was $$85$ per share, Carla Vista Corp. issued $$10$ million of $7\%$

convertible debentures due in $20$ years. The conversion option allowed the holder of each $$1,000$ bond to convert the bond into $6$

common shares. The debentures were issued for $$10\mathrm{.}5$ million. The bond payment's present value at the time of issuance was $$8\mathrm{.}3$

million and the corporation believes the difference between the present value and the amount paid is attributable to the conversion

feature. On January $1,2024,$ the corporation's common shares were split $2$ for $1,$ and the conversion rate for the bonds was adjusted

accordingly. On January $1,2025,$ when the fair value of the corporation's common shares was $$149$ per share, holders of $25\%$ of the

convertible debentures exercised their conversion option. Carla Vista applies ASPE and uses the straight$-$line method for amortizing

any bond discounts or premiums.

$($a$)$

Prepare the entry to record the original issuance of the convertible debentures. $($Credit account titles are automatically indented

when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the

amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

Contributed Surplus $-$ Conversion Rights